Wraps are facilities setup by the larger wealth management groups, that have one major benefit: simplified paperwork for you, since all your managed funds are combined and reported in one place.

But they also have one MAJOR downfall: excessive fees.

If you are happy with your AMP setup, then why would you want a wrap?
It certainly doesn't sound like you need one, since you have obviously been able to manage your AMP investment... you don't need to pay someone else another percent to reprint your statement on a different letterhead!

By coming here you have taken your baby steps towards financial independence. You'd most likely be better off asking this forum whether a fund you are considering is a good idea. After all, we don't take trailing commissions for the rest of your life!

For more discussion about how wraps work (and particularly why you might avoid them), see "Why I started the Eureka Report" at Eureka Report. I have copied the text to here:
The investment industry in Australia has managed to set itself up with a beautiful structure – for those who are lucky enough to be in it, that is. For the rest of us it is a racket. If someone flew in from Mars they would take one look at the way things work and say: “Wow! How has this been going on? How do I join in the game?”

I believe most participants in the investment industry know they are on an unsustainably good thing, and just want to keep their heads down and keep raking in the money for as long as possible. Every day that they don’t get rumbled is a great day.

But at its heart the system for assisting individual Australians to manage their long term savings is deeply appalling. Thankfully more and more people are waking up to it.

Eureka Report is intended to be an alarm clock.

Think about these things:

1. The salesmen on whom the whole industry rests are called “planners” or “advisers”. It is a simple but effective accident of history that means most customers don’t know they are being sold to, and that they are dealing with a commission-based salesperson. They think they are just being advised. Many advisers are very good at what they do, many are not. It’s pot luck. And as for getting sophisticated, relevant analysis of investment markets and techniques … forget it.
2. The basic technology being “sold” is a simple computer programme called a platform or wrap account that passively administers investment portfolios and which wholesales to advisers for a couple of hundred dollars a year. Yet “advisers” charge thousands for it - a service that costs them almost nothing and is basically a device for selling other products (managed funds) for extra commissions.
3. Worst of all, every service in the industry – advice, administration and investment management – is billed as a percentage of the customers’ assets. This is the greatest rort of all.

THE BAD NEWS

There are two things wrong with percentage fees: most customers don’t understand what a percentage can really cost and they operate as an annuity stream for the service provider that is automatically indexed at between three and four times the inflation rate every year.

The average retail managed fund has an MER (management expense ratio, or total fee) of around 2 per cent per annum. Half a per cent of that is usually kicked back to the “planner” as a trailing commission (a sales commission paid forever) and the planner often charges the client another 0.5% to 1% for the platform or wrap account, plus a 5% upfront entry fee.

To most people with no experience of financial matters it all sounds fairly reasonable. Except that someone with savings of $200,000, which is not very much, might be coughing up $10,000 up front and $3000 a year. That is $250 a month, every month.

Would they pay that much if an invoice was sent each month? Maybe, but they might start asking what they were getting – especially if they hadn’t heard from the adviser for six months and they knew the fund manager had just put the money into the top 20 stocks.

But more importantly a percentage fee increases each year with the amount being invested and, on average, investment returns tend to be around three times inflation over the long term. Lately they have been five times the inflation rate.

Since investment fees are a percentage of the amount invested, and that amount is increasing by between 8 and 12 per cent a year, then the fees are increasing by that much as well – automatically. No discussion, no justification for increasing prices by triple the CPI year in year out, just automatic price increases. And if you make contributions as well as reinvest the investment returns back into your account, the fees rise even faster.

Are there any greater costs for the industry as the sums invested rise like a tide? No.

THE GOOD NEWS

The good news about investing is that – tax issues aside – it isn’t all that complicated: it is possible for someone with common sense and diligence, and the right tools, to do it themselves. Unlike with health care or – for most people - motor mechanics, you don’t have to put yourself at the mercy of an investment industry that charges too much and often can’t be trusted.

But it’s important to understand that investing is work. It is not gambling, or wishing and hoping, or trying to get the inside dope: it is work; a second job. Nevertheless with the right kind of support, you can do it and you can beat the pros.

Eureka Report is the beginning of an attempt to provide that support and to redress the balance - to give ordinary people the tools and the knowledge to become independent and reclaim the control - and the money! – that is rightfully theirs.

We will provide investment strategies mixed with explanations about markets. We’ll provide the best information and analysis on DIY super and other taxation issues. And we’ll provide insights and expertise, not only from our own team of experts, but from the top analysts and fund managers in the country.

Wrap accounts and mastertrusts do provide a very useful administration service but the other advantage is getting access to wholesale managed funds.

The Eureka Report makes reference to retail managed funds having an MER fee of 2%, some even more, whereas wholesale managed funds can be as low as 0.15%, but the only way you can get to them is through a wrap account or mastertrust.

Also, for many investors, the only way that you can get to use certain funds, such as DFA (Dimensional Funds Australia) is through a mastertrust or wrap because to directly to them, you need to have at least $500,000 and that's only for one investment option (such as Aus Value Companies). Wrap accounts provide the opportunity to spread your $5,000 between many wholesale managed funds so you get great diversification and they handle all the paperwork which does become a nightmare if you go direct.

Some wraps are more expensive than others, but some are very reasonably priced. The problem is this - most financial planning groups are aligned to a particular mastertrust. For instance ANZ owns ING, so if you go and see an ANZ adviser, I bet you get recommended the ING Mastertrust. Commonwealth Bank owns Colonial, Westpac = BT, NAB = MLC, AXA = Summit, St George = ASGARD etc etc.

If you're seeing a financial planner, demand that they recommend one that has the lowest cost. If they start crapping on about features or service, stand strong because there isn't a great deal of difference between the service (they're all quite good, some exceptions) and there aren't that many features required. Ask for a detailed analysis of how the one that you have been recommended compares to others in the market. It's not hard, and it will test how professional your adviser is and reveal any potential conflicts of interests in the advice they provide. For instance, some dealer groups only have one wrap account or mastertrust on the Approved Product List. If this is the case, you have to wonder why. If the fees on that one are much higher than others in the market, good chance, they're getting slice of the action.